Car owner wins, ICICI Lombard General Insurance Co. Ltd. asked to settle his claim

Mayur Batra had purchased a Ford Endeavour Utility Vehicle from South City Motors, the authorized dealer, in Delhi. The vehicle, costing Rs13.57 lakh was insured with ICICI Lombard General Insurance Co. Ltd., for which premium of Rs50,550 was paid. The vehicle was insured from February 28, 2006 to February 27, 2007.

On December 8, 2006, the vehicle got damaged in an accident. It was towed to South City Motors, the authorized workshop, where Batra was told the damage could only be rectified by replacing the chassis and body. The repair cost was estimated at Rs14 lakh, more than the price of a new vehicle. A claim was lodged with the insurer for total loss.

At the behest of the insurer, the workshop carried out repairs instead of replacement. A bill for Rs4,81,148 was initially raised and a further Rs1,91,000 added later. When Batra inspected the repaired vehicle, he noticed the brakes were not working and that it could not be taken for a test drive. The workshop also refused to give any assurance regarding the safety of the repaired vehicle. Batra filed a complaint before the Delhi state commission against the workshop as well as the insurer, and demanded the chassis as per the original estimate and certified to be safe and roadworthy, else the claim must be settled on total loss basis.

The defence raised by the insurer was not accepted by the state commission. It ordered the insurer to settle the claim by paying the insured value after deducting 5% toward depreciation, clear the repair bill and take possession of the vehicle from the workshop. Batra was also awarded Rs10,000 litigation costs.

In appeal, the National Commission observed the surveyor had gone against the opinion of the workshop that replacement of the chassis was necessary. Hence, it was not possible to certify the vehicle to be safe and roadworthy, when even the brakes were not functioning properly.

In its order of July 28, delivered by C Viswanathan for the Bench along with Prem Narain, the National Commission held evading obligations under the contract of insurance constituted a deficiency in service and an unfair trade practice. It upheld the order passed in Batra's favour by the state commission, and dismissed the insurer's appeal.

Source: The Times of India

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